Novavax, Inc. (NASDAQ:NVAX) will lay off 30% of its workforce after posting worse than expected third quarter earnings and failing a Phase 3 clinical trial on a Syncytial virus vaccine candidate. The layoff will be followed by a reduction in spending on research and development. The company expects to incur one-time restructuring costs in the range of $3 million and $4 million because of the layoffs.

Novavax Disappointing Q3

Novavax saw its revenue take a dive by more than half in the recent quarter, negative news that came on the heels of disappointments on clinical trials front. During the third quarter, the company posted a net loss of $66.3 million compared to a net loss of $33.1 million generated the same quarter last year.

Laying off workers and trimming expenditure on R&D is part of a larger plan that hopes to curb further cash burn. During the earnings call Chief Executive Officer, Stanley Erk, said they are planning to reduce cash burn by between $70 million and $100 million in 2017 compared to 2016.

“We have identified a clear path forward that we expect will provide us with important clinical data throughout 2017 and protect liquidity. We have the balance sheet to execute this plan. We have resized our organization consistent with this plan and look forward to reporting data from these programs in 2017,” said Mr. Erk.

Stock Performance

It now awaits to be seen if the proposed cost cuts will have an impact on the stock’s sentiments on the street. Novavax has she more than 80% in market value since the start of the year. Its sentiments on the street have mostly been affected by reports candidate drug for the treatment of a respiratory virus failed to have the desired effect on older adults.

The RSV clinical trial failure has plummeted the company into disarray barely a year after it announced plans to expand its research, development, and clinical support. The company had also hoped to add 850 jobs on positive clinical trial results.